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Audio Pioneer Buys Newsweek

Sidney Harman, a 91-year-old audio pioneer, will be the new owner of Newsweek, the Washington Post Company announced on Monday after a two-and-a-half-month search.

Now what does this deep-pocketed entrepreneur do with a magazine that lost nearly $30 million last year alone?

“It would be a remarkable conceit to tell you at this stage in the game that I have a plan,” Mr. Harman said in an interview shortly after the announcement. “The plan is there to be had. I regard myself as well equipped.”

Mr. Harman, who turns 92 on Wednesday, joins the likes of David Bradley and Laurence Grafstein, who made their money in ventures outside of publishing, then chose to take over struggling national publications. Asked why he was taking on this challenge now, Mr. Harman replied, “Because I think I should stop misspending my youth.”

“By no means do I have a sense that print media is done,” he said. “We are at an inflection point among print, mobile and digital.” It is, he added, “not a challenge to an entrepreneur to get on board when the inflection point has passed.”

The Post Company and its chairman, Donald E. Graham, turned away several potential buyers who they believed would lead the magazine in a markedly different editorial direction or make deep cuts in the staff of about 325. A person briefed on Mr. Harman’s bid has said that he would retain about 250 of the magazine’s employees.

In a news release, Mr. Graham said, “In seeking a buyer for Newsweek, we wanted someone who feels as strongly as we do about the importance of quality journalism. We found that person in Sidney Harman.”

Mr. Graham, who was said to be concerned not only with the magazine’s legacy but the legacy of his family’s half-century of stewardship of the magazine, wanted the sale to cause as few disruptions as possible. The news release said that Mr. Harman intended to “keep a majority of Newsweek’s very talented staff.”

Not, however, Jon Meacham, who announced that he would leave as editor once the sale was complete. No successor was named. Mr. Meacham appeared with Mr. Harman in the Newsweek offices on Monday but said nothing as Mr. Harman charmed the assembled staff, according to a person who was there.

“I am sure Mr. Harman will be a good steward of the magazine and of its values,” Mr. Meacham said in an e-mail. “As I have told him, I will be rooting for him and for his team.” He added, “My own future will work itself out in due course.”

The financial details of the sale were not known, though one person with knowledge of Mr. Harman’s bid said last week that Mr. Harman had offered to pay $1 in exchange for absorbing Newsweek’s financial liabilities. A second person briefed on the sale said that very little cash would change hands, and that that Mr. Harman had agreed to assume more than $50 million in liabilities from The Post. As part of the deal, the Post Company will keep cash that Newsweek subscribers have already paid, and Mr. Harman will honor subscriptions, this person added.

The Post Company said Monday that it expected its loss or gain from the sale to be immaterial.

Newsweek has struggled through the recession more than most weekly news magazines. As recently as 2007 it was earning $30 million a year — the amount it lost last year.

Photo

Newsweek’s editor, Jon Meacham, said he would step down once the sale was complete.Credit
Tina Fineberg/Associated Press

The longer it remained on the market, the less tenable its financial situation became. It has been an expensive product for the Post Company to produce, with its various international editions and separate back-office positions that were specific to the magazine. Instead of sharing a general counsel and accounting staff with the Post Company, for example, Newsweek has its own employees in those positions.

The magazine’s top editors and managers redesigned it last year in hopes of attracting more readers and advertisers. But the new product, with more commentary and analysis on the news of the week, failed to catch on.

What the sale to Mr. Harman suggests, perhaps more than anything else, is that the right owner for a struggling media property like Newsweek is someone who can afford to lose tens of millions of dollars a year while the magazine tries to find a more successful approach.

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“It always seemed clear to me that the person or people who bought Newsweek were going to have an egotistical or emotional reason for stepping in — that it wasn’t going to be purely a business decision. Because if you looked at the numbers, it just didn’t make sense,” said Charles Whitaker, a professor of journalism at Northwestern University.

The sale hardly signals the beginning of a turnaround for Newsweek and could ultimately prove to be little more than a stopgap, Mr. Whitaker added. “I don’t think anyone can stare at the tea leaves and see this as being the salvation for Newsweek. It could only be delaying the inevitable. It will take a lot of wisdom, foresight and really hard thinking about what a newsweekly should be like in a digital age.”

In its new owner, Newsweek appears to have an engaged and active steward. Mr. Harman seems unwilling and unready to have a quiet retirement. He started a business selling FM radios in the 1950s and built it into one of the largest audio equipment companies in the world, stepping down as the chief executive of Harman International Industries, which makes JBL and Infinity audio equipment, at age 88. He has continued to teach a business class at the University of Southern California and has said that when he plays golf, he walks all the way through 18 holes, and occasionally more.

He is married to Jane Harman, a Democratic congresswoman who represents Southern California. Asked whether being married to a congresswoman might represent a conflict of interest, he replied: “We’ve been married for over 30 years. I’ve never told her how to run the government and she’s never told me how to run the business. That’s absolutely fundamental to us.”

Mr. Harman is also active in the Aspen Institute, a research organization led by Walter Isaacson, the former editor of Time.

A version of this article appears in print on August 3, 2010, on Page B1 of the New York edition with the headline: An Audio Pioneer Buys Beleaguered Newsweek. Order Reprints|Today's Paper|Subscribe